Foley Co., E.C. Ernst Plead Innocent in Bid-Rigging Case

ByCliff Tan

July 18, 1983

Five companies, including two Washington-area firms, and six of their executives have pleaded innocent to federal charges that they conspired to rig bids for electrical work done at eight U.S. Steel Corp. plants.

The Washington-based Howard P. Foley Co. and E. C. Ernst Inc. were among the firms and individuals arraigned Friday in U.S. District Court in Pittsburgh. Joseph J. Rodgers, Pittsburgh branch manager for the Foley Co., was among the six individuals indicted and entered a plea of not guilty.

The defendants have 10 days to file pre-trial motions, a Justice Department spokesman said. No trial date was set.

The Foley Co. and Ernst, along with other electrical contractors and company officials, were indicted July 1 on allegations that they divided up the available work at western Pennsylvania plants of U.S. Steel, fixed prices and submitted noncompetitive bids.

On June 8, the Foley Co., along with Bancroft T. Foley Jr., its president and chief executive officer, were indicted on similar charges in Seattle, along with five other corporations and seven other individuals. Foley and the Howard P. Foley Co. also pleaded innocent in the Seattle case.

Joseph E. Griffin, chairman and chief executive officer of Ernst, which is undergoing reorganization under Chapter 11 of the federal bankruptcy laws, released a statement holding previous management at his company responsible for any possible misdeeds.

The Foley Co., based in Washington, is a low-profile, high-volume electrical contractor whose fiscal year 1981 (ended March 31, 1981) sales were approximately $235 million, according to the Pittsburgh indictment.

Ernst is based in Fairfax and was one of the nation's leading electrical contractors before petitioning for reorganization in 1978. It recently reported contract income of $57.6 million for the fiscal year 1983 ending March 31.

A spokesman for U.S. Steel said it was too early for the company's lawyers to decide whether to press for civil damages. In this type of antitrust case, the court can award triple damages to those hurt by collusion.